Response to reporting on Home Collected Credit

22 March 2018

Morses Club PLC: Response to recent reporting on the Home Collected Credit ("HCC") sector

Morses Club has noted recent media and consumer group calls for the tighter regulation of the HCC sector. In response, Morses Club makes the following observations:

Morses Club provides vital short-term funding for some of the 10 million adults in the UK unable to access mainstream sources of finance. The Company has a 130-year heritage in HCC and currently has 229,000 valued customers to whom it provides an essential service to cover shortfalls in income and unexpected household expenses.

Morses Club offers transparent fixed interest rate products and does not charge its customers any fees or penalties for late payments, ensuring they never pay more than their original agreement, regardless of circumstances. Morses' customers value the face-to-face highly personalised service it provides and consistently award Morses Club with 95% or more customer satisfaction scores.

Paul Smith, Chief Executive Officer of Morses Club, commented:

 "As a responsible, fully FCA regulated lender, we welcome calls for greater transparency and regulation across the entire sector, but we also call on parties on all sides of the debate to recognise the reality facing individuals who rely on the HCC sector today.

"The likely unintended consequence of restricting access to HCC lending will be that many individuals will be forced to turn to unregulated lenders charging punitive repayment terms, which will remove any ability to regulate or control consumer debt. Indeed, according to the England Illegal Money Lending Team (IMLT), it is estimated that 310,000 people are using illegal money lenders, which equates to a staggering 3 individuals for every 10 customers of regulated HCC firms.

 "We take our responsibilities very seriously and are proud of the role Morses Club plays in supporting local communities across the UK. We look forward to engaging with parties across the sector to strive for transparency and fair outcomes for all customers."

For further information

Notes to Editors

About Morses Club

Morses Club is the second largest UK Home Collected Credit lender with 229,000 customers and 2,050 agents across 98 locations throughout the UK.

The Company offers a range of loan products to its customers through its extensive agent network. The majority of the Company's borrowers are repeat customers and the Company enjoys consistently high customer satisfaction scores of 95 per cent or above.

The Company is using technology to broaden its offering and provide new products to ensure customers can access credit with the flexibility they require. In April 2016 its cashless lending product, the Morses Club Card, was introduced, enabling its customers to buy online as well as on the high street. Dot Dot Loans, the Company's first online instalment product, was launched in March 2017.

Morses Club successfully listed on AIM in May 2016.

About the UK non-standard credit market

The UK non-standard credit market, of which UK HCC is a subset, consists of both secured and unsecured lending and is estimated to comprise around 10 million consumers.

Non-standard credit is the provision of secured and unsecured credit to consumers other than through mainstream lenders. Lenders providing non-standard credit principally lend on an unsecured basis. 

Since 2009, unsecured personal lending has grown from £161 billion to £244 billion in 2015.

UK Home Collected Credit

UK HCC is considered to be a specialised segment of the broader UK non-standard credit market. UK HCC loans are typically small, unsecured cash loans delivered via self-employed agents directly to customers' homes. Repayments are collected in person during weekly follow-up visits to customers' homes.

UK HCC is considered to be stable and well-established, with approximately 3 million people using the services of UK HCC lenders, of which 1.5 and 2 million people borrow regularly.